BEFORE THE
POSTALRATECOMMISSION
WASHINGTON, D. C. 20268-0001
Docket No. R97-ii” I7 r-/ 11 ffi ‘97
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INTERROGATORIESOFADVO,
INC.
TO UNITED STATES POSTAL SERVICE WlTNESS
Wll I IAMM.TAKIS(ADVOIUSPS-T41-2-51
POSTAL RATE AND FEE CHANGES,
1997
:
Pursuant to sections 25 and 26 of the Rules of Practice, Advo, Inc. (Advo) directs
the following interrogatories
to United States Postal Service witness William M. Takis.
the witness is unable to respond to any interrogatory,
provided by appropriate
we request that a response be
USPS witness capable of providing an answer,
Respectfully
submitted,
homas W. McLauahlin
Burzio 8 McLaughlin
1054 31st Street, N.W.
Washington, D. C. 20007
Counsel for ADVO, INC.
CERTIFICATE
OF SERVICE
I hereby cei-tify that I have on this date served the foregoing document upon all
participants of record in this proceeding in accordance with section 12 of the Rules of
Practice.
Thomas W. #Laughlin
September
17, ‘1997
If
ADVO, INC. INTERROGATORIESTO
ADVO/USPS-T41-2.
USPS WITNESS TAKIS (USPS-T-41)
Please refer to witness Takis’s workpapers,
Section IV.A,
page 1.
(a)
For the facer/canceler
operation cost pool (“CANCEL”),
costs by subclass/category
(b)
do the volume variable
shown on page 1 include allocations
Iof mixed-mail
and not-handling-mail
costs?
For the facerlcanceler
operation cost pool, please provide the following
breakdowns, of volume variable costs, separately for each subclass/category
shown on page 1 of Takis’s workpaper:
(1)
Direct-item
(2)
Counted
(3)
Uncounted
mixed-mail
(4)
Mixed-mail
identified container costs;
(5)
Mixed-mail
unidentified
(6)
Not-handling-mail
(7)
Any other cost elements not included in l-6 above (please specify).
ADVOIUSPS-T41-3.
mixed-mail
is non-volume-variable.
item costs;
container
costs;
IV.13, pages 1 and
you show total accrued cost
million is volume-variable
and $99.544 million
You show that First Class Mail accounts for 8f3.914 percent of
total volume varlable costs, or $167.295 million.
incremental
costs;
operation cost pool (“CANCEL”),
million, of which $188.154
items;
item costs;
Please refer to witness Takis’s workpaper
2. For the facer/canceler
of $287.698
costs excluding costs for counted mixed-mail
You have also calculated
cost for First Class Mail of $226.649 million.
an
(If you disagree with any of
these figures, please provide the correct figures and explain how they ‘were derived).
(a)
Does this mean that if First Class Mail were removed from the system, the Postal
Service’s accrued cost for this cost pool, by your estimate, would become $61.049
million (i.e., $287.698
Class incremental
million total accrued cost minus $226.649
cost)?
million First
(b)
-2Does this mean that if First Class Mail were removed from the system, the
remaining
total volume-variable
cost for other classes for this cclst pool would
become $:20.859 million (Le., $188.154
million total v-v cost minus $167.295
million First Class v-v cost)?
(c)
Does this mean that if First Class Mail were removed from the system, the volume
variability ,for the facerlcanceler
operation cost pool would become 33.4 percent
(i.e., $20.859 million total v-v cost for the remaining classes divided by $61.049
million accrued
cost)?
If you disagree with any of the above figures, explain why, provide the correct figures,
and show how you calculated them.
ADVOIUSPS-T41-4.
(a)
Please refer to your workpapers,
Section IVA and IV.B
Please confirm that you used the 65.4 percent volume variability factor derived by
witness Bradley for the “Cancel & Mtr. Prep” MODS activity (USP!;-T-14,
Table 7) to
develop incremental
related to
facer/canceler
cost estimates for the following
cost components
operations:
Takis Workoaoer Source
Subclasses
Groups
Comoonent
VvP “,“,“tt; IV.A
VvP Section IV.B
Cancel
pp. l-2
Capital - Letters Cancel
13-18
5-6
Capital - Flats Cancel
13-18
5-6
5-6
Capital - Cull
13-18
Labo’r - Letters Cancel
19-24
7-8
Labo’r - Flats Cancel
19-24
7-8
19-24
Labomr- Cull
7-8
PartslSuppies - Letters Cancel
25-30
9..10
PartslSuppies - Flats Cancel
25-30
9,-l 0
PartslSuppies - Cull
25-30
9,-l 0
(b)
Please confirm that each of the above components
the total costs related to the facer/canceler
component,
represents
a separate part of
operation (i.e., the costs shown in one
such as “labor - letters cancel,” are not included in or duplicative
costs shown in any of the other components,
such as “cancel”).
of
If not, identify and
-3quantify any overlaps between components,
components
and explain how totals for these
may be calculated.
ADVONSPS-T41-5.
Please refer to Takis workpaper
references
Section 1V.B. and the
components
anld workpaper
listed in (a) above.
Subject to rounding
differences,
please confirm that for the combined ten cancel-related
components
listed in (a) above:
(a)
the total accrued cost is $428.983 million.
(b)
the total volume variable cost is $280.555 million.
(c)
the total non-volume-variable
(d)
the total volume-variable
(e)
First IClass Mail’s volume-variable
volume-variable
(f)
cost is $148.428
operation
million.
cost for First Class Mail is $253.952
million.
cost constitutes 90.5 perc:ent of the total
cost.
First ‘Class Mail’s incremental
If (except for rounding differences)
cost is $349.426
million.
you cannot confirm, please provide the correct
figures, and show how you calculated
them.